I took a look at the video you linked to - ages ago I developed for a client a prototype of an app combining gameplay mechanics taken from the tower defence (Fieldrunners, geoDefense Swarm) and action role-playing (The Legend of Zelda) genres, so I don't believe an app similar to Arel Wars would be difficult to develop for any developer of reasonable ability - just time-consuming

I agree with sealfin's assessment. I believe he meant to say that the game does NOT appear difficult to develop, meaning that a developer with even moderate graphics and gaming development experience could do it, but it does appear to be a time-consuming project because, even at first glance, there are a lot of details in there and probably plenty more below the surface. It wouldn't surprise me if it may take a single developer at least a year of development time and possibly more.

Really!? A full year? What is the norm for a game? Please assume that all graphics are done by us.

In terms of say cost to get it developed.. what would you rate this game out of 10, 10 being very expensive? Approximately how much would this cost be? Please again assume that graphics are handled by us and this is just for the coding.

This is a bit of a "how long is a piece of string?" question, which might be why you're struggling to get answers of a finer grain. The answers depends on a lot of unknowns, like the experience of the programmer, how much is designed up front, whether an existing game engine is to be used (and whether the programmer is already familiar with it), how deep and/or complex the gameplay/interfaces are, and so on.

You could ask 20 developers and get 20 wildly varying answers.

However, on the question of ambitiousness I suppose it's not too difficult to figure out a scale. If we think of something like RAGE or MASS EFFECT as a 10, and a basic scrolling shootemup as a 1, then a tower defense + rpg crossover... Let's see. There's no physics simulations and art is all 2D, both of which simplify production enormously. And it looks readily doable on existing 2d game engines. Movement of all the visual elements is going to be a lot more involved than in a basic scrolling shootemup, and implementing the rpg side of the game is more a question of time than difficulty.

Ball park guess, perhaps low 2 through to high 3, depending on how complex the game's design is and the experience of the team.

Yes, a year is not at all unreasonable for one developer to write the game you propose. I had already assumed that the developer would not be working any of the artwork assets and that an artist or team of artists would develop all of the artwork. Programming is harder and more time-consuming than you apparently believe. Every single movement, special effect, and game mechanic must be painstakingly programmed by the developer. Since you seem to be more familiar with the art side of the equation, ask yourself this: How long would it take one single artist to draw the graphics for every single aspect of this same game? Take that number and multiply it by at least 2 or 3 to come up with a rough idea of the work required of a single developer. A rockstar dev might be able to do it in slightly less time. A junior developer might take twice as long or more, although through his inexperience, he would probably estimate it to be much less.
Oh, and as for cost, assuming that you are going to contract an average, mid-level developer for $70/hour (that's likely low-balling it) full-time for a year, then you can assume a one-year cost of about $146,000. Hire a junior developer full-time with benefits, and you might be able to get away with $50,000, but it will take him more time and the quality of the work will inevitably be lower. A rockstar developer probably won't do contract work for less than $100/hour.